Woolsey v. Panhandle Refining Co.

• Decision Date: 11 May 1938
• Docket Number: No. 7188.,7188.
• Citation: 116 S.W.2d 675
• Parties: WOOLSEY v. PANHANDLE REFINING CO.
• Court: Texas Supreme Court

Page 675

116 S.W.2d 675

WOOLSEY v. PANHANDLE REFINING CO.

No. 7188.

Supreme Court of Texas.

May 11, 1938.

Error to Court of Civil Appeals of Second Supreme Judicial District.

Action on a contract for lifetime employment by W. N. Woolsey against the Panhandle Refining Company. To review a judgment of the Court of Civil Appeals, affirming a judgment dismissing the action, 97 S.W.2d 257, plaintiff brings error.

Judgments of trial court and Court of Civil Appeals affirmed.

Kearby Peery and Phillip S. Kouri, both of Wichita Falls, for plaintiff in error.

R. C. Stanford and A. H. Britain, both of Wichita Falls, for defendant in error.

John W. Craig, of Dallas, amicus curiæ.

SHARP, Justice.

The principal question presented here is whether an employer and an employee can make a valid contract obligating the employer to furnish lifetime employment to the employee, which contract is in violation of the Workmen's Compensation Law. Article 8306 et seq., Vernon's Annotated Texas Civil Statutes.

W. N. Woolsey filed suit against the Panhandle Refining Company, alleging that the company carried compensation insurance; that he was injured and made a contract with the company to the effect that, if no claim were filed with the Industrial Accident Board, he would be employed for life; that he did not file such claim, and continued to work for the company to May 20, 1935, when he was discharged. The district court sustained a general demurrer to his petition. The case was appealed to the Court of Civil Appeals at Fort Worth, and the judgment of the trial court was affirmed. 97 S.W.2d 257.

The parties will be designated here as they were in the trial court.

Plaintiff in substance contends: (1) That the opinion of the Court of Civil Appeals in this case is in conflict with the opinion of the Court of Civil Appeals at Dallas in the case of Duff v. Ford Motor Co., 91 S.W.2d 871; (2) that the Court of Civil Appeals erred in holding that plaintiff's petition was subject to general demurrer on the ground that it violated article 8306 of the Workmen's Compensation Law; (3) that the Court of Civil Appeals erred in upholding the action of the trial court in sustaining the general demurrer to its petition, on the theory that the contract had to be approved by the Industrial Accident Board before it became valid, because this was a common-law case, based on a contract between an employer and an employee, and was not a settlement between the insurance company and the employee. On the other hand, defendant contends that the alleged contract for lifetime employment, in consideration of the employee's not filing his claim with the Industrial Accident Board, nullified the Workmen's Compensation Law as to his claim, and that such contract was, and is against public policy, and is, therefore, void; and, furthermore, that the insurer, which was solely liable for the payment of compensation, could not have made any such agreement of settlement, and that the defendant, who had no liability for such compensation, could not make a contract of settlement, the sole consideration being for the benefit of the insurer, and that the alleged consideration for such contract is illegal and in violation of the Workmen's Compensation Law, and is contrary to public policy.

The controlling facts alleged in plaintiff's petition are brief, and are as follows: Plaintiff alleged that he was employed by the defendant on September 1, 1926, when he was injured, which entitled him to compensation; that the defendant carried compensation insurance; that he informed the defendant of his injuries, and requested the defendant to file a claim for him before the Industrial Accident Board; that the general superintendent of the defendant told him that their compensation rates were exceedingly high, and if his claim were filed the rates would be raised considerably higher; that, if the plaintiff would not file his claim for compensation, the defendant would employ him for life at his then current salary of $150 per month; that, relying upon such offer, and in acceptance thereof, he did not file his claim; that the defendant complied with its contract for a period of seven years, but that on May 20, 1935, the plaintiff was discharged without just cause. Plaintiff prayed for judgment for the amount of his losses by reason of the discharge.

We shall notice first the contention that the opinion of the Court of Civil Appeals in this case is in conflict with the opinion in the case of Duff v. Ford Motor Co., Tex.Civ.App., 91 S.W.2d 871.

The Court of Civil Appeals in this case, in an able opinion written by Chief Justice Dunklin, recognizes that the facts in the two cases are similar, and after quoting from the opinion in the Duff Case used the following language (page 258 of 97 S.W. 2d): "By counter proposition appellee presents the contention that plaintiff's agreement not to file his claim with the Industrial Accident Board for compensation was forbidden by the Workmen's Compensation Act, and, being illegal, it could not be a sufficient consideration for the alleged contract of the defendant upon which a recovery was sought. Apparently, that point was not discussed in the opinion in the Duff Case, and it may be assumed that the same objection was not urged in that case, either in the trial court or in the Court of Appeals. And it does not appear that a writ of error was ever applied for in the Supreme Court."

We shall brush aside the question raised by Chief Justice Dunklin as to the contention not being presented in the Duff Case, and shall consider the question as if it had been presented. We have carefully considered the opinion rendered in the Duff Case and the decisions cited in support thereof. The decisions cited do not involve the construction of the Workmen's Compensation Law. Since we shall later discuss the provisions of the law and its construction by the courts, we simply say that the opinion of the Court of Civil Appeals at Fort Worth in this case correctly construed the law as applicable to the contract in controversy.

Workmen's compensation laws have become part of our public policy. The object of the laws was to do away with the issues of negligence, unavoidable accident, assumed risk, contributory negligence, and other like issues, and to fix the amount recoverable free of any uncertainty. The old system of settling disputes was unsatisfactory, and modern business methods demanded that compensation for injuries to employees be not controlled by the fault or negligence of the employee, but should rest upon broader, more humane, and more certain rules. To meet the demand for a change in the settlements for injuries received in the course of employment, the Legislature of this state enacted our present Workmen's Compensation Law. The public policy of this state relating to settlements for injuries is now expressed in that law.

The law is comprehensive in its terms, and prescribes in detail how employers of labor may, at their election, become subscribers. Article 8308, §§ 7, 18a, 19, and 20. It also provides that the employee may elect not to accept employment under the terms of the law. Article 8306, §§ 3a and 3b. It also defines what issues shall not be a defense to an action to recover damages for personal injuries sustained by an employee in the course of his employment. Article 8306, § 1, subdivisions 1, 2, 3, and 4. The law also provides an exclusive remedy for those who adopt the benefits contained in said law. Article 8306, § 3.

Section 3 of article 8306 reads as follows: "The employes of a subscriber and the parents of minor employes shall have no right of action against their employer or against any agent, servant or employe of said employer for damages for personal injuries, and the representatives and beneficiaries of deceased employes shall have no right of action against such subscribing employer or his agent, servant or employe for damages for injuries resulting in death, but such employes and their representatives and beneficiaries shall look for compensation solely to the association, as the same is hereinafter provided for."

Section 15 of article 8306 reads: "In cases where death or total permanent incapacity results from an injury, the liability of the association may be redeemed by payment of a lump sum by agreement of the parties thereto, subject to the approval of the Industrial Accident Board. This section shall be construed as excluding any other character of lump sum settlement except as herein specified. In special cases where in the judgment of the board manifest hardship and injustice would otherwise result, the board may compel the association in the cases provided for in this section to redeem their liability by payment of a lump sum as may be determined by the board." (Italics ours.)

The Workmen's Compensation Act of 1913, Acts 1913, c. 179, did not prohibit parties from making settlements independently of the Industrial Accident Board. In 1917 the act was amended, Laws 1917, c. 103, Vernon's Ann.Civ.St. art. 8306 et seq., and now...